After reading our headline you might be thinking ‘What does this have to do with wealth management or financial advice?’ Good question…and we’ll get to the answer before the end of the page. But first, let’s take a cursory look at how Artificial Intelligence is already creeping into people’s lives in unanticipated ways. Although you may think you are not interested in AI, remember the cautionary words of Trotsky, ‘You may not be interested in war, but war may be interested in you’.

Perhaps you saw the news story this week about a couple in Oregon whose Alexa device recorded a conversation they were having and then decided to send the recording to one of the people on the couple’s list of contacts. No, really! You can read the story here: https://www.marketwatch.com/story/oops-amazons-alexa-recorded-couples-conversation-sent-it-to-random-contact-2018-05-24?mod=MW_widget_latest_news

Unfortunately, there have also been Artificial Intelligence problems that have led to more serious consequences. In Tempe, Arizona a self-driving Uber car failed to avoid a pedestrian crossing the street. Tragically, the 56-year-old woman was struck and killed. Apparently, the car actually did detect the presence of an object and perhaps could have avoided the impact (or at least lessened it) but it seems the automatic braking feature had been turned off. So, the fault (likely) shifts back to the human driver…who mistakenly relied on a system that was not operating. Ironically, even though the AI system may not have been at fault, if the car had not been equipped with the AI system the accident may not have occurred.

My point on all of this is just this: Every day we encounter a new AI interface, often in places completely unexpected. Indeed, there are even options to have artificial intelligence handle your financial portfolio — something where ‘real’ intelligence might be preferred! At every turn there is a new thing offering to do our thinking for us. Today’s technological advances are nothing short of astounding. And the benefits — both present and promised — are undeniably wondrous and far-reaching. However, rushing into the world of artificial intelligence does not mean that we should stop using the intelligence we already have.

Market Minute 5/25/2018 – Perhaps the Best Leading Indicator says…

Performance of retail stocks is an important gauge of U.S. economic strength. Retailers perform well during periods of economic strength. Retail stocks as a group have been consolidating in bullish fashion for more than three years. They haven’t broken down, but it has not been soaring either. This lengthy period of consolidation follows a huge rally that took place in the retail space from the beginning of the bull market in 2009 through early 2015. Since then, money has been rotating into other areas of the stock market. That appears to be changing at this time. In the Sector indicators, apparel retailers broke out yesterday. Clothing & Accessories also broke out. Footwear has broken out. And finally, specialty retailers have broken out. Others are closing in on breakouts. The XRT (indicator of retail group) hasn’t made a breakout above its January high, but the bullishness on the daily charts of late is quite apparent.

The stock market is one of the best, if not the best, leading indicators of our economy. Volume in this space is increasing and price momentum is bullish and accelerating. What does this say about the stock market’s expectations of our domestic economy moving into summer and the second half of 2018? I say our economic picture continues to improve. Consider this an alert for the remaining bears in the investor group. 

Memorial Day

From usmemorialday.org:

Memorial Day started off as a somber day of remembrance; a day when Americans went to cemeteries and placed flags or flowers on the graves of our war dead. It was a day to remember ancestors, family members, and loved ones who gave the ultimate sacrifice.

But now, too many people “celebrate” the day without more than a casual thought to the purpose and meaning of the day. How do we honor the 1.8 million that gave their life for America since 1775? How do we thank them for their sacrifice? We believe Memorial Day is one day to remember.

To help re-educate and remind Americans of the true meaning of Memorial Day, the “National Moment of Remembrance” resolution was passed in December 2000. It asks that at 3 p.m. local time all Americans “voluntarily and informally observe in their own way a Moment of Remembrance and respect, pausing from whatever they are doing for a moment of silence or listening to Taps.”

  

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com

This weekly article reflects news, commentary, opinions, viewpoints, analyses and other information developed by Denk Strategic Wealth Partners and/or select but unaffiliated third parties. DSWP provides Market Information for illustrative and informational purposes only. If you wish to receive this weekly commentary by email please contact us at 602-252-8700 or by e-mail at lindaw(at)denkinvest.com. If you are receiving this commentary via email and would prefer not to please let us know either by email or phone.

Ronald Denk is an Advisory Representative offering services through Denk Strategic Wealth Partners, A Registered Investment Advisor. He is also a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation. Information in this commentary is the sole opinion of Denk Strategic Wealth Partners. Past performance is no guarantee of future returns. All market related investments involve various types of risk, which include but are not restricted to, credit risk, interest rate risk, volatility, going concern risk, and market risk.

The Update provides information of a general nature regarding legislative or other developments. None of the information contained herein is intended as legal advice or opinions relative to specific matters, facts, situations or issues. Additional facts, information or future developments may affect the subjects addressed in this document. You should consult with an attorney, accountant or DSWP planner about your particular circumstances before acting on any of this information because it may not be applicable to your situation.

Lincoln Financial Securities and Denk Strategic Wealth Partners and their representatives do not offer tax advice. Please see your tax professional regarding your individual needs.

*The indices are representative of domestic markets and include the average performance of groups of widely held common stocks. Individuals cannot invest directly in any index and unlike investments, indices do not incur management fees, charges, or expenses, therefore specific index returns will be higher. Past performance is not indicative of future results.

LFS-2132882-052518